VAT Return Calculator UK

The VAT registration threshold is £85,000 for 2025/26. If your taxable turnover exceeds this in any rolling 12-month period, you must register for VAT. You can also voluntarily register below this threshold, which can be beneficial if you sell mainly to VAT-registered businesses.

Under the standard scheme, you charge VAT on your sales (output VAT) and reclaim VAT on your purchases (input VAT). Each quarter, you pay HMRC the difference. If your input VAT exceeds output VAT, HMRC refunds the difference to you.

The flat rate scheme simplifies VAT by applying a single percentage to your gross turnover (including VAT). The rate depends on your business type. You cannot reclaim input VAT on most purchases (except capital goods over £2,000). It suits businesses with low costs relative to income.

The flat rate scheme is generally better when your input VAT is low relative to your sales (e.g., service businesses with few purchases). If your purchases are high (e.g., retail, manufacturing), the standard scheme usually saves more because you can reclaim all input VAT.

Cash accounting means you account for VAT based on when you receive payment (not when you invoice). This helps cashflow because you do not pay VAT on invoices until customers pay you. You can use cash accounting if your turnover is under £1.35 million.

VAT returns are normally due quarterly, one month and 7 days after the end of the quarter. For example, a quarter ending 31 March has a return deadline of 7 May. Most businesses must file using Making Tax Digital (MTD) compatible software.

The domestic reverse charge for construction services means the customer (not the supplier) accounts for VAT. This applies to VAT-registered builders providing standard or reduced-rated construction services to other VAT-registered businesses in the construction supply chain.

Yes, under the standard scheme you can reclaim VAT on capital purchases used for your business. On the flat rate scheme, you can reclaim VAT on single capital purchases over £2,000 (including VAT). You must have a valid VAT invoice to make a claim.

If your taxable turnover exceeds £85,000 in any rolling 12-month period, you must register within 30 days. If you expect to exceed it in the next 30 days alone, you must register immediately. Late registration can result in penalties and backdated VAT charges.

Exports of goods to non-UK countries are zero-rated for VAT. You do not charge VAT but must keep evidence of export. Services to non-UK businesses generally follow the "place of supply" rules and may also be outside the scope of UK VAT, depending on the type of service.